By Hritam Mukherjee
(Reuters) -Shares of ITC Hotels fell in debut trade on Wednesday, following its spin-off from consumer goods firm ITC, valuing the luxury hotels operator at 366.2 billion rupees ($4.23 billion).
The stock fell to as low as 172 rupees, compared to a discovered price of 180 rupees determined during a pre-open trading session. It was last down 2.2% at 176 rupees.
ITC spun off its hotel business into a separately listed firm to focus on its core cigarettes and food business, as the unit is among the conglomerate’s smallest by revenue and also capital-intensive.
Shares of the parent firm, which now owns a 40% stake in ITC Hotels, were down 0.8%.
ITC Hotels’ listing performance was in line with expectations, but the stock is witnessing selling pressure as it is set to exit key indices such as Nifty 50, Nifty FMCG and BSE Sensex, said Prashanth Tapse, senior vice president of research at Mehta Equities.
Brokerage Jefferies estimated post-listing outflows to the tune of $190 million to $200 million.
Shares of rivals EIH and Indian Hotels, which own the “Oberoi” and “Taj” brands respectively, were up roughly 2% each.
ITC Hotels’ market valuation is second only to Indian Hotels, which is valued at 1.08 trillion rupees. EIH has a market value of 222.67 billion rupees.
ITC Hotels, with its luxury property offerings, is stepping into the equity market at a time when affluent Indians are splurging on premium products ranging from watches to cars, apartments, and even bathrooms.
It operates more than 140 properties across India, Nepal and Sri Lanka, and offers premium amenities including private swimming pools, jacuzzis, and desert safaris.
India’s luxury hotels market is expected to be valued at $4.83 billion by 2030 from $2.99 billion in 2025, estimates from market analytics firm Mordor Intelligence showed.
($1 = 86.5790 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Varun H K)
